Are you planning to expand your business into new markets? International trade is one of the fastest growing areas of the world economy, with billions of potential clients who may be interested in your commodity or products.
However, preparing your business to export can be daunting at times. You’ll need to thoroughly research your new market, devise an in-depth strategy, secure the necessary funding and grow your presence in this new market. So before you make any major decisions, consider these tips and guidelines.
Determine your capacity
Don’t commit to anything before you have determined whether you have the capacity to export. Research all of the costs that will be involved with exporting your commodity/product – from packaging and transportation, to marketing and staff training – to get an idea of the start-up capital that you will require.
Explore your options
Look for a country that has a market for your product/commodity, and where you will have an advantage over your competitors – this advantage could be where your commodity is grown, how your product is produced, or your superior staff training methods.
Targeting a market with similar cultural traditions to your own, as well as where English is commonly spoken, will obviously be to your advantage, but don’t let this limit you!
Check out trade agreements
Consider the time, energy and money that you could save by exporting to a country that has a favourable trade agreement with South Africa, as this could remove some of the red tape and lower the costs of exporting.
For example, the Trade, Development and Cooperation Agreement between South Africa and the European Union provides preferential rates for exportation. And a trade agreement established between members of the Southern African Customs Union (SACU) – namely, South Africa, Botswana, Lesotho, Namibia and Swaziland – allows for the duty-free movement of goods between these five countries.
Get to know the rules and regulations
It’s great to have a commodity or product that people want to buy, but you need to have an understanding of how customs works to export successfully.
Make sure that you understand the regulations that apply to the location you are exporting to, the rules regarding the product/commodity that you are exporting – including the documentation that must accompany your shipment – or you may lose out on time, money and customers.
Develop an export plan
Once your company has made the commitment to export, you have done your research and you have chosen your new market, you need to create an export plan. This plan should outline company objectives.
The plan should include short- and long-term goals – marketing strategies, preferred distribution channels, the required financial resources, and details of local regulations, standards and export payment mechanisms.
Also bear in mind that consumer spending power varies from place to place, so you may need to rethink your pricing model to avoid undercutting yourself, or pricing yourself out of a market.
A risk management strategy should be included in your export plan, as venturing into international markets will expose your business to new risks, such as legal issues, political instability and unfamiliar shipping regulations.
Prepare your shipment properly
Help your business to run smoothly and efficiently, by packaging your shipment according to the standards and regulations of the country you are exporting to, and ensuring that you include all of the documentation that is required. Always be as descriptive as possible when filling in the commercial invoice, as this paperwork is the “passport” of your shipment.
Allow yourself time to test, tweak and perfect your operations before you expand into new markets. When you are completely ready internally to export, expand your business at a pace that feels right for you, or you may find yourself overwhelmed by a large number of orders, with no way to fulfil them.
Find a trusted global transportation provider
Unfortunately, in spite of having fantastic commodities or services to offer, many companies lose out on sales and experience sluggish growth due to a lack of efficient logistics management and transportation.
If you’re considering expanding your business into African markets, ACT Logistics can help with freight forwarding, secure warehousing, pick and pack services and affordable air, road, and sea freight – essentially providing end-to-end management of your supply chain.
With our expertise (a result of nearly two decades in the industry) and real-time tracking system, we guarantee you peace of mind.